The Food for Peace Arsenal
Yost, Israel
Recent hearings held by the Subcommittee on Economy in Government of the Joint Economic Committee, headed by Senator William Proxmire, have lead to a series of revelations about the full extent...
...First, PL 480 has for the most part worked against local agrarian reform efforts...
...military families...
...And while we're on the subject of military uses of PL 480, another little device might be worth mentioning...
...The government could either give them away or sell them somehow outside the dollar market...
...Often times these last long enough to establish a western (U.S...
...The uses are divided into two categories: United States uses and country uses...
...organization active in the country...
...One such program is agricultural export market development...
...i-4lar transactions...
...These local currencies, variously referred to as foreign currency proceeds, sales proceeds, and counterpart funds, become the property of the United States, and are deposited in a U.S...
...for 1963 and subsequent years, exports under barter contracts which benefit the balance of payments and rely primarily on authority other than Public Law 480...
...The needs first of the wartorn capitalist nations of Europe, and then of the Korean War, delayed the imminent crisis, but by 1953 surplus foodstuffs in the warehouses of the CCC were a costly embarassment to Congress and the nation...
...Generally these are the initial costs of land purchase and plant construction, but conceivably the corporations can use them for any of their local expenses...
...From that time on, the program was primarily an instrument of foreign policy, even to the extent that the food shipments were no longer limited exclusively to surplus products...
...6The case of Turkey is a clear example of this phenomenon...
...42, 8/23/67...
...AJJDC) American Red Cross American Relief for Poland (ARP...
...3 / May-June 1971 Published monthly, except May-June and July-August, when it is published by-monthly, at 160 Claremont Ave., New York, New York 10027...
...agricultural trade and producer groups...
...foodstuffs...
...Nonprofit Voluntary Organizations Participating with U.S...
...agencies operating overseas, and thus alleviate the U,S...
...7. U.S...
...FARM SURPLUS However, neither politico-military strategy, nor the humanitarian concerns commonly associated with Food for Peace (and foreign aid in general), were the primary motivation behind the initial adoption of PL 480.2 Rather, the lawmakers of the 78th Congress (1954) were worried about the prevailing crisis in U.S...
...This is fine for the U.S, balance but disastrous for the balances of the recipient countries...
...V, No...
...There are two fundamental ways in which this can be done...
...FOOTNOTES 1. Murray R. Benedict and Elizabeth Bauer, Farm Surpluses: U.S...
...uses include the payment of obligations incurred by U.S...
...was totally unacceptable to the Democrats, and suggested by few if any Republicans...
...760 - 39 175 244 1,218 318 1, 536 2, 970 4,506 27 1950------ 752 ------ 43 159 65 1,019 214 1,233 2,.622 3,855 26 1959...
...Under this provision, loans are made to U.S...
...T h is Food for Profit...
...4. PL 480 counterpart funds thus differ from those generated by AID program assistance, which are owned by the local government, and used subject to U.S...
...The Food for Peace Arsenal...
...CRS evidently became a U.S...
...Just as it is impossible to state which particular expenditures would have to be foregone in the absence of counterpart, so nobody can tell by how much, if anything, the earmarked outlays would by reduced in the absence of earmarking...
...All this did not, of course, alter the Turkish budget one bit, and there is no evidence that the military sector of the budget suffered any losses...
...paymaster in 1965 at the request of General Westmoreland, who was concerned that the Regional Forces had received a raise, but the Popular Forces (militiamen) had not...
...Just how the recipient countries, already collapsing under the weight of tremendous debt burdens, are going to survive this further claim on their future resources, is far from clear, What is clear, however, is that U.S...
...public relations purposes) to certain "development" items in the budget...
...Government in Programing Title II Commodities, 1969 American Joint Jewish Distribution Committee, Inc...
...soybean oil exports were paid for by PL 480...
...Particularly, since a significant portion of the budgets of nations receiving food aid is for defense expenditures, it is clear that an equally significant portion of "economic assistance" goes to the military...
...The designation of counterpart funds is therefore of political rather than economic significance...
...Agency for International Development (Food for Peace Program) and the Colombian government to improve local storage and transportation facilities...
...2, See Peter A. Toma, The Politics of Food for Peace (Tucson, Arizona, 1967), 3. Denis Goulet and Michael Hudson, The Myth of Aid (New York, 1971) p. 87...
...Much of this expansion can be attributed to an intensive world-wide cooperative effort on the part of Government and numerous private U.S...
...food aid, utilizing the mechanism of counterpart funds to give direct aid to foreign military establishments...
...899 152 73 180 19 1,323 26 1,349 4,880 6,229 21 19686--9-------- 815 239 79 132 41 1,306 47 1. 353 5. 29 6.081 19 1967 - - 736 193 10 179 13 1,229 33 1,262 5,118 6,380 19 19068 |-0- 40 384 101 150 3 1 178 11 1.189 5,039 6,228 19 19609 ----------- 335 427 103 153...
...Yet it must be remembered that despite Proxmire's surprise and newspaper reports of "secret" military aid, this use of PL 480 funds is completely within the bounds of the legislation, and has been a clearly discernible part of the program since Congress gave birth to it in 1954...
...Recently the title has been broadened somewhat to include such "developmental" programs as Food for Work, child feeding (school lunch programs), and the World Food Program...
...That is, "strategic" countries NORTH AMERICAN CONGRESS ON LATIN AMERICA (NACLA) Vol...
...That is to say, a substantial amount of the "development" grants and loans made under the Food for Peace program are in reality used to pay the expenses of the local military establishment...
...Although some of the commodities are granted in response to natural disasters such as the Peruvian earthquake, most are used in long-term feeding programs...
...The provision for "common defense" has always been one of the most important, and a quick but careful perusal of the PL 480 annual report would have revealed to any interested party the million dollar sums exposed in the hearings...
...The commitments formulated can be for as long as ten years, and payment of principle and interest may be over a period of up to twenty years...
...The Defense Department, however, has no worries on this count when it comes to common defense grants, since they are extra-budgetary and require no matching dollar appropriations...
...In Fiscal 1968, for example, almost 90 percent of U.S...
...Loans to private enterprise" refers to currencies disbursed under the Cooley amendments to PL 480, passed in 1957...
...6 Since the profitability of an investment in one area of the agribusiness sector is very much dependent on the proper functioning of all the areas, it was important for Ralston Purina that these facilities be built...
...1 e hearings, for example, referred to expenditures of Title I counterpart funds under Section 104 (c) for common defense goods and services...
...p. 62...
...Once funds are channeled into local government budgets, the specifications as to their use become virtually meaningless...
...Humphrey's persistence eventually paid off, however, and immediately after his inauguration, President Kennedy established a White House Food for Peace Office, appointing George McGovern as its first director...
...military aid to foreign countries...
...In effect, they depend upon them to meet many of their budget expenses...
...Title II provides for famine and other urgent relief assistance to any "friendly" nation or people that is in need of it...
...It shouldn't have...
...foodstuff as part of the recipient nation's diet, with the consequent boon to U.S...
...U.S...
...Country uses include monies for the "common defense," economic development and budget support and loans to private enterprises...
...The situation in Laos and Cambodia is quite similar...
...Subscription price: $5 per year for individuals...
...Box 57, Cathedral Park Station, New York, N.Y...
...The solution of pure laissez-faire capitalism -- to leave the market in complete freedom (with the subsequent nose-dive in prices, etc...
...The projects may have been initiated by the recipient government, or by some U.S...
...corporations "invest" in the Third World without expending any dollars to do so...
...voluntary agencies to use in their overseas programs...
...account in the local central bank...
...8. Alexis E. Lachman, The Local Currency Proceeds of Foreign Aid, OECD, (no date) p. 81...
...Yet, whichever way you look at it, one thing is clear: when Lyndon Johnson referred to Food for Peace as a "shining example of human compassion," he failed to mention that the "shine" was on the barrel of a gun...
...These exports are included in the column headed "Commercial sales...
...In such cases, the sale of U.S...
...The Mutual Defense Assistance Act of 1949 included excess food commodities accumulated by the Commodity Credif Corporation (CCC) as an item of "defense support...
...For example, Ralston Purina, which operates a feed mill in Colombia, "worked with the U.S...
...One of the most important functions of the U.S...
...government agencies spending overseas, specifically by trading surplus commodities for goods and services that the agencies need...
...When combined with the various other devices which the aid program provides for U.S...
...12...
...Also included under Title II (originally it was part of Title III) are grants of PL 480 commodities to U.S...
...export items...
...One of the most recent provisions for use of PL 480 counterpart funds is for financing population control programs...
...Although PL 480 has throughout its history been most concerned with the expansion of exports, there is evidence that the program is increasingly being utilized by large agribusiness for their overseas subsidiaries...
...The first is to participate in specific PL 480 projects which ultimately benefit the corporations' activities in a given country...
...uses is to reduce the dollar outflow caused by the 35-odd U.S...
...Thus PL 480 merely expanded the military dimension of U.S...
...aid logic...
...Copyright Q 1971 by the North American Congress on Latin America, Inc...
...The massive farm output developed during World War II had resulted in a post-war level of production that far exceeded normal U.S...
...Title IV, which was added to the law in 1959, provides for long-term food supply contracts between the United States and food deficit countries...
...The more important uses to which the sales proceeds are put will be discussed later in some detail...
...As a matter of fact, because counterpart currencies must be purchased at official exchange rates, many agencies prefer to stretch their dollars by buying at better rates...
...9 So if we estimate the military part of an average national budget at, say, 20 percent, we discover that of the $7.2 billion allocated under PL 480 for economic development, some $1.4 billion probably went to the military...
...aid programs, PL 480 allows the United States, through its ownership of large amounts of local currencies, to U.S...
...31,19691 lIn millions of dollars] Public Law 480 Total agricultural exports Government- _ to-govern- S Long-term ment dona- Donations I Sales tor dollar and tions for through Total tal Public La Calendar year foreign convertible disaster voluntary Barter Total Mutual Government Commercial agricultural 80asper currency foreign cur- relief and relie Public security programs sales exports cent of rency credit economic agencies Law 480 (AID)- total sales development Title I IV II III 1954, July-Decem - ber...
...The value of these goods amounted to about 25 percent of a soldier's monthly wage.10 Who knows what the CIA might be doing with PL 480 goods in Laos and Cambodia...
...And, thirdly, one must wonder what the recipient countries are going to do with the ever-mounting debt burden to which PL 480 is yet another contributor...
...Barter is now employed primarily to offset the dollar drain caused by U.S...
...Washington, D.C., 1960) p. 32, as quoted in V.M...
...Tne loans for economic development, which comprise the other three-forths, are usually designed to finance a specific project agreed upon at the signing of the sales agreement, but are-more accurately viewed as simply budget support for the recipient government...
...The food deficits of most underdeveloping countries stems from underproductive use of the land, which in turn is the result of an agrarian structure in which relatively few landowners control almost all of the arable land...
...37-8...
...Dollar exports of American farm products grew from $2.1 billion in 1955 -- the first full year of the joint government-industry foreign market development program -- to a record of $5.0 billion in 1968...
...It involves the use of political and economic pressures to alter the local agricultural structure so as to favor U.S...
...By pushing for the "modernization" of agriculture -- i.e., the use of mechanized equipment, hybrid seeds, chemical fertilizers, plastic packaging -- the United States creates a dependence on those U.S...
...Instead of purchasing the local currencies they need on the local exchanges, these agencies obtain them from the pools of currencies held in the U.S...
...Assembly of God-Foreign Service Committee (AOG) CARE, Inc...
...1966, pp...
...1,006 42 81 178 137 1, 444 35 1,479 3,555 5,034 29 1963...
...Then too, it is quite common for foreign military establishments to solicit and obtain aid from the Defense Department without going through their own legislatures...
...How these loans can be classified under "country uses" defies even the normal contortions of U.S...
...Department of State, "The Problem of Excess Accumulation of U.S.-owned Local Currencies...
...Title I authorizes sales of surplus commodities to "friendly" food-deficit countries, which pay for them in their own currencies...
...farm products, July 1, 1954, through Dec...
...4 49 124 117 1.304 157 1,461 3,371 4,832 27 1961...
...it also is the market for certain U.S...
...In fact, the President is required by law to weigh, before entering into any agreement on the sale of PL 480 commodities, the extent to which the recipient country is "carrying out voluntary programs to control population growth...
...interests are being amply protected...
...As Business Week once put it, "there are many pitfalls, but some -crporations] make profit by helping the hungry to feed themselves...
...On the one hand, the United States would sell surpluses to food-deficit countries for their value in local (non-convertible) currencies, and on the other hand, it would give them to governments and voluntary relief agencies to meet temporary and not-so-temporary emergency needs...
...In fact, most of the grants should be viewed likewise...
...Since 1962, however, it seems that a reduction in the strategic stockpiling needs of the U.S...
...Despite the emergence of these "new" methods of food assistance, most of the food goes to such unnatural disasters as South Korea and South Vietnam...
...During the 1950's, then, PL 480 was primarily an instrument of domestic policy, and the pet of the farm lobby...
...This "new partnership" in the world agribusiness market is the talk of the trade, and an important part of the "green revolution...
...In effect, then, this multinational corporation was able to use public capital (both U.S...
...The $693 million figure cited in the Proxmire...
...WRC) Multilateral Organizations Participating with U.S...
...le met with stiff opposition from the farm interests, who were generally sceptical of foreign aid, and who wished PL 480 to remain a business-like method of surplus disposal, not become an aid "giveaway...
...Cooley loans amount to still another device by which U.S...
...263 56 186 262 767 351 1,110 2, 081 3,199 24 1956-------- 638 65 187 372 1,262 449 1,711 2,459 4, 170 30 1957...
...This is especially true in a country like India, where the United States owns or controls a tremendous proportion of the total currency pool (estimates for India go as high as two-thirds...
...22which the United States induced to divert disproportionate resources to military objectives, were elegible to receive economic assistance, including food, as a compensation for this diversion...
...Dandekar, The Demand for Food, and Conditions Governing Food Aid During Development, FAO (Rome, 1965) p. 36...
...In some countries, local governments lack sufficient strength and stability adequately to finance their expenditures by taxes or sound borrowing...
...The fact that PL 480 facilitates the loss of these dollars indicates that the program is really less concessional than its billing would have one believe...
...Or George McGovern, a key supporter in the House of the original PL 480, and a director of the Food for Peace office in 1961 and 1962...
...One such "revelation" was that the Food for Peace program has provided money for other governments to buy $693 million in military equipment over the past five years...
...The third country use, "economic assistance," takes two different forms -- grants for economic development and loans for general budget support...
...a Not available...
...This type of exchange is used in the stockpiling of such important metals as zinc, lead, bauxite, and beryllium...
...Specifically, Catholic Relief Services, a major distributor of Title II commodities throughout the world, was discovered using the surplus foodstuffs as pay for South Vietnamese militiamen...
...Source: 1969 Annual Report on PL 480 NACLA NEWSLETTER Vol...
...More important, however, is the fact that payment must be made in dollars (or convertible local currencies, which amounts to the same thing), rather than non-convertible local currencies...
...It can thus provide millions of dollars of hardware to its client armies without submitting them to the direct scrutiny of the Congressional Pentagon-watchers...
...The economic distortions resulting from black market trade, misuse by the voluntary agencies, the destruction of small farmers, etc., all come in addition to the structural abuses which have been built into the law...
...Between 1955 and 1970, South Korea was the first and South Vietnam the third largest recipient of this government-to-government emergency aid...
...agriculture...
...multinational corporations to pay for the local currency costs they incur...
...Recent hearings held by the Subcommittee on Economy in Government of the Joint Economic Committee, headed by Senator William Proxmire, have lead to a series of revelations about the full extent of U.S...
...In addition, some $30 million of Food for Peace counterpart is to be used for military assistance to Cambodia during fiscal 1971...
...The law provides for some eighteen uses of these local currencies, and their manipulation is the main foreign policy lever that the program provides...
...According to the 1968 Food for Peace report, this aspect of PL 480 has been extremely successful...
...agencies in recipient countries (such as Embassy costs), as well as the costs of special activities formulated under the provisions of PL 480 (such as agricultural trade development...
...farm sector, but the conception and administration of the program in the 1960's has been that of the U.S...
...Total expenditures since the beginning of PL 480 have been $1.5 billion, of which more than two thirds has gone to South Korea and South Vietnam...
...The real gift the Food for Peace program extends to the Defense Department is that these military assistance funds do not show up on its own budget...
...1 , 161 52 99 160 37 1,509 11 1, 520 4,066 5 5584 27 1964...
...Catholic Relief Service-USCC (CRS' Church World Service (CWS) HADASSAH Lutheran World Relief, Inc...
...They borrow them at interest rates "comparable to those charged by local development banks" (i.e., low), and serve once again to alleviate U.S...
...To fill this gap, CRS gave 7,000 tons of food (PL 480) and clothing (privately donated, but transported by PL 480) per month to 150,000 militiamen and their 550,000 dependents...
...balance of payment considerations, a shift from Title I to dolAGRICULTURAL TRADE DEVELOPMENT AND ASSISTANCE ACT OF 1954, AS AMENDED Public Law 480-83d Congress An Act TO INCREASE THE CONSUMPTION OF UNITED STATES AGRICULTURAL COMMODITIES IN FOREIGN COUNTRIES, TO IMPROVE THE FOREIGN RELATIONS OF THE UNITED STATES, AND FOR OTHER PURPOSES...
...and Colombian) to enhance the profitability of its private investUment...
...2The disposal of surplus meant, in a certain sense, dumping on the world market excess commodities that no one wished to see dumped on the national market...
...agricultural export trade can be seen in the last column of Table 1. If one includes the value of other government programs which subsidize food exports the proportion for the 1950's averages around 36 percent, and for the life of PL 480 (1955-69) around 29 percent...
...The importance of PL 480 foodstuffs within the context of total U.S...
...USES OF COUNTERPART As was stated earlier, the main political thrust of the Food for Peace program lies in the uses to which the counterpart funds are put...
...As mentioned earlier, a great many of the counterpart uses, including military housing, require matching dollar appropriations...
...The second country use, grants for common defense, is from a strategic point of view the most important...
...2 20 22 70 211 281 1,304 1,585 4 1955...
...agribusiness...
...Under this law food aid could be used as a substitute for or supplement to direct military assistance...
...Instead, several remedial devices came under consideration -- price supports, production controls, and the disposal of surpluses -and all, in varying degrees, were adopted as policy...
...The grants are made as contributions to the local currency requirements of specific projects that have been approved by the Agency for International Development...
...Second-class postage paid at New York, New York.-3of foreign policy...
...Then in 1963 the two governments agreed to discontinue this earmarking and list it as general budget support...
...But then, if Proxmire wasn't well disposed to reading annual reports, he could have dropped the question over lunch with such Senate cronies as Hubert Humphrey, "the Congressional father of the Food for Peace program," and a prime advocate of its foreign policy importance...
...government offers to food deficiency problems--population control-is an increasingly important element in the Food for Peace Program...
...I Annual exports have been adjusted for 1963 and subsequent years by deducting exports under barter contracts which improve the balance of payments and rely primarily on authority other than Public Law 480...
...The second means by which multinational agroindustry benefits is more complex...
...4 Sales for foreign currency, economic aid, and expenditures under development loans...
...32 11 175 1.050 158 1,208 2,747 3,955 217 19600..10..1...
...India, Pakistan, Yugoslavia, and Brazil have received the bulk of these grants, which have totalled $1.7 billion since 1954...
...The only real remedy for this structural underproduction is a radical reform or revolution in land tenure...
...Berkeley, 1960) pp...
...They amount, however, to less than one forth of the total PL 480 economic assistance...
...V, No...
...1960] 7 The use of counterpart funds thus represent an easier means of obtaining revenues than such measures as tax reforms that threaten the interest of the rich landowners and industrialists...
...aid-commodities for Vietnamese currency provided the local government with roughly twothirds of its revenue receipts...
...1,233 97 62 186 43 1.621 23 1,644 4,704 6.348 26 1965...
...In addition, some of the counterpart monies were attributed (for U.S...
...CARE, Catholic Relief Services, and Church World Service account for over 90 percent of the foodstuffs distributed in this way...
...aid program...
...corporations which have a virtual monopoly on expertise in these areas...
...Hubert Humphrey, a strong supporter of the law in 1954, tried as early as 1956 to move the program in the direction Table I Value o U.S...
...counterpart support for its armed forces...
...accounts at the local central banks...
...COUNTRY USES Country uses fall under three headings: loans to private enterprise, grants for common defense, and economic aid to recipient governments...
...It is interesting to note here that another of the "solutions" that the U.S...
...6. Ray A. Goldberg, "Agribusiness for Developing Countries," Harvard Business Review, Sept./ Oct...
...LWR) Mennonite Central Committee (MCC) People-to-People Health Foundation (Project HOPE) Seventh Day Adventist Welfare Service, Inc...
...9. Ibid., p. 75...
...3, No...
...1 1,018 (1) 1,018 4.918 5,936 17 July 1, 1954 through Dec...
...corporations to plow the fertile soils of the Third World, it seems almost inevitable that capitalist world agriculture will soon become U.S...
...alarm products shipped under Public Law 480 compared with total exports of U.S...
...Government in Programing, 1969 United Nations World Food Program (WFP) United Nations Children's Fund (UNICEF) United Nations Relief and Work Agency (UNRWA)-7use the threat of economic disaster as a political club...
...The agencies involved must, in effect, purchase the local currencies with dollars from their regular budgets...
...agencies utilizing counterpart funds range from the acquisition of foreign publications by the Library of Congress to the acquisition of housing and related facilities for U.S...
...The government provides not only the food, but also overseas freight costs for these foods and the agencies' own donated commodities, as well as small amounts of surplus property and excess U.S.owned local currencies...
...The law has retained most of the provisions which were designed to protect the interests of the U.S...
...For the moment it is important to note only that Title I operations have accounted for well over half of the food exports under PL 480 (see Table 1...
...SAWS) World Relief Commission, Inc...
...In any case, since this bartering can be more effectively carried out under the legal provisions of the CCC Charter Act, barter under Title III is virtually non-existent at the present time...
...balance of payments problem...
...A few of these programs, however, are a direct outgrowth of PL 480, and would probably not exist were it not for the availability of counterpart funds...
...commercial exports when the program is reduced or abolished...
...Michael Novak, in National Catholic Reporter, Vol...
...Box 226, Berkeley, California 94701 I ~~~~~~~~~~~~~ Ill Minimum contribution for one-year subscription: $5.00...
...Of the several sections under Title III, the most important provides for the barter exchange of surplus commodities for strategic materials...
...5. 1968 Annual Report on Public Law 480 -- Food for Peace (Washington, D.C...
...Colombia: The March Outburst...
...In addition, the United States pressures recipient governments to pursue the "development" of agriculture through the private rather than the public sector...
...8 Budget support, whether or not it is identified as such by AID, can thus be used as a cover for expenditures in particularly sensitive parts of the budget...
...government has resulted in a playing down of this function of PL 480...
...Most would be carried out in the absence of the Food for Peace program, and many, in fact, require Congressional-appropriated dollars to match the counterpart monies spent...
...Between 1951 and 1962 the Turkish government received substantial U.S...
...THE FOUR TITLES The Food for Peace program operates under four titles of the law...
...878 93 151 11 1,304 1179 1,483 3.541 5.024 26 1962...
...balance of payments position...
...veto powers...
...SOME EFFECTS Although up to this point many of the negative effects of the Food for Peace program have become apparent, there are several specific ones which must be emphasized...
...domestic and export requirements...
...In addition to the deci sion-making powers that accompany all U.S...
...A second, and extremely important effect of PL 480 is the increased capacity to manipulate and control underdeveloping economies that the program gives to the United States...
...10025 P.O...
...In other words, dollars they would have spent abroad are kept at home...
...The activities of U.S...
...Since 1954, PL 480 funds totaling $116 million have been spent on market development activities...
...88-9...
...and in the case of the two religious agencies mentioned, government funding amounts to well over half their total budgets...
...agriculture...
...3 Yet the foreign policy potential of PL 480 became increasingly more evident, and attempts were made to incorporate it into the overall foreign aid program...
...11,762 1,587 1,111 2,631 1,731 18622 2,223 20, 45 58.901 79,746 23 t Export market value...
...It is the intent of the current law to facilitate, because of U.S...
...Because this aid does not impinge on domestic revenues, or on the balance of payments, the local military can often keep these transactions out of the national budget...
...balance of payment problems...
...Food for Peace, however, offers an easier "solution" to this problem, Instead of altering the land base and working toward agricultural self-sufficiency, local governments are allowed and even encouraged to import U.S...
...10 for institutions...
...Burden or World Asset...
...Since it is expected that a substantial portion of the counterpart funds resulting from any sales-agreement will become available (whether in grants or loans) to the local Mgovernment for additional spending, governments tend to look upon these funds as part of their general revenues...
...Discovery of the military use of local currency proceeds (counterpart funds) generated by the Food for Peace program came as a shocking surprise to Proxmire and many observers...
...ICommercial sales for dollars include, in addition to unassisted commercial transactions, shipments of some commodities with governmental assistance in the form of short- and medium-term credit, export payments, sales of Government- owned commodities at less than domestic market prices, and...
...Yet since the effective dollar demand was not about to expand to the point of absorbing these surpluses, and since the United States had a large stake in preserving the stability of the world agricultural market, only two acceptable means of disposal overseas remained...
...The Agricultural Trade Development and Assistance Act of 1954 (PL 480) provided mechanisms for both of these options...
...The foregoing review has been primarily a structural analysis of Food for Peace, and has not touched on many of the specific abuses which the program engenders...
...In fiscal 1970, the order changed a bit, with Brazil first, South Vietnam second, and South Korea third...
...14 Issue . . N List of Previous NACLA Articles...
...As a result, the agricultural sector of the American economy has consistently enjoyed a favorable balance of exports over imports, thereby helping to offset drains elsewhere in the U.S...
...Both knew full well the "common defense" provision, and could have saved Proxmire from his public trauma, The use of food aid for military purposes wasn't even an idea original to PL 480 when it was passed in 1954...
...5 And PL 480 does not limit itself to merely developing markets...
...Congress was evidently unaware when it approved $185 million for the Cambodian military that this extra was being tacked on...
...31,1969...
...3 / May-June 1971 50 C NEWSLETTER P.O...
...Thus the aid transactions are really carried on between the two militaries, and are not subject to the priorities of civilian control bodies...
...Public Law 480, under which legislative authority Food for Peace functions, contains clearly defined provisions concerning the use of the counterpart resulting from the surplus sales...
Vol. 5 • May 1971 • No. 3
